PNB launched its pilot project of branchless banking in Daringibadi

The Punjab National Bank (PNB) as a pilot project launched mobile or branchless banking service at Daringibadi in tribal dominated and backward Kandhamal district. Recently the district has been in news for prolonged ethnic and religious strife.

PNB’s project aims to reach out to people in remote areas where banking services have not reached till now and bring them under the cover by opening no frills account in their name. “It is a technology based financial inclusion (FI) project and aims to cover vast number of un-banked rural people", said chairman-cum-managing director of the PSU bank, K.C. Chakrabarty.

Before the launch of the pilot project Chakrabarty told the reporters at Gopalpur, about 15 kms from here that the bank selected Kandhamal district in the state to launch its pilot project because large number of people in this tribal district are unaware of the benefits of banking. About 80,000 out of 6.50 lakh people of the district are using banking services.

"Initially the project will cover Dringibadi area, the biggest block of the state and gradually it will be extended to other parts of the district”, BP Sharma, the head of the bank, Orissa circle, said. He added that the New Delhi headquartered bank main aim is to extend the services to other backward districts of the state including Gajapati.

At Daringibadi Chakrabarty also inaugurated the bank’s new and 62nd branch in the state along with a bio-metric ATM. It is the eleventh project of PNB in Orissa, which aims to cover 30,000 villages, 15 million households and 75 million people by 2010 next under the rural financial inclusion program. He maintained till now the bank has already covered 10,886 villages and opened 5.32 lakh no frills accounts.

Earlier PNB has launched such pilot projects at Neemrana in Rajasthan, Patna and Gaya in Bihar, Sharanpur in Uttar Pradesh, Chandigarh, Ranchi in Jharkhand, Dehradun in Uttarakhand, Taran Trana in Punjab and Kullu and Mandi in Himanchal Pradesh.

For mobile banking the bio-metric cards, thermal filter and near filed communication ((NFC) mobile handsets are required to operate this unique banking service in the rural areas where such facilities of modern technology far from the reach. The chairman of the bank said, “The system is very cost effective and requires less manpower. It also helps in providing banking service at the doorstep of the people in far flung areas without opening new branches".

PNB to cut rates after cut in CRR, others yet to think

After the cut in cash reserve ratio (CRR) by the Reserve Bank of India (RBI), Punjab National Bank (PNB), the country’s third-largest lender, is planning to cut down the lending rates for home, auto and education loans.

After the reduction the new auto loans will be 50 basis points cheaper, moreover lending rates on new and existing auto and home loans will also fall by the same margin. PNB Executive Director JM Garg informed at present no decision on corporate loans has been taken.

Punjab & Sind Bank is to take up the matter on revising rates tomorrow while other banks are adopting a wait-and-watch strategy.

The central bank has cut the CRR for the third time in the last two weeks and brings the combined cut to 2.5 percentage points. After this, the CRR will be 6.5 per cent.

Bankers pointed out lenders such as PNB and State Bank of India, which had raised interest rates by 100 basis points three months ago, might go for reduction now.

On the other hand private lenders like HDFC Bank and Standard Chartered Bank said they will not lower rates. An ICICI Bank source said the lender will decide only after assessing the cost of funds.

“The steep rise in cost of resources was not passed on the customers and it will be status quo now, perhaps indicating that customers may not get the benefit of any drop in the borrowing costs,” said HDFC Vice-Chairman & Managing Director Keki Mistry.

Standard Chartered Bank’s CEO for India and South Asia, Neeraj Swaroop, said: “We have been lending, and we will continue to lend. But lending will be lot easier for us with these cuts. It is too early to say if this CRR cut will lead to any cut in our lending rates.”

While Bank of Baroda Chairman and Managing Director MD Mallya said the bank will first watch the situation before deciding the course of action. His counterpart at UCO Bank, SC Goyal, said the Kolkata-headquartered bank is not planning an immediate rate cut, yet.

“We are not in a hurry as there are larger issues to be handled at this point. We are going slow on retail lending and had avoided a steep rise in rates earlier,” said Allahabad Bank Chairman & Managing Director KR Kamath.